Page last updated at 18:30 GMT, Wednesday, 7 January 2009

M&S boss: 'I won't take pay rise'

Marks & Spencer chief executive: I won't take a pay rise

Marks and Spencer chief executive Sir Stuart Rose has said he does not intend to take a pay rise this year.

And he also believes it unlikely that he will be receiving a bonus.

His comments came on the day M&S revealed it planned to close 25 of its small Simply Food stores, two of its regular stores and cut 1,230 jobs.

"I certainly won't be taking a pay rise," he told BBC business editor Robert Peston. "It would be inappropriate for me to do so."

Sir Stuart continued: "I am 99.9% certain there won't be a bonus. I certainly won't be getting anything over and above what my staff will enjoy."

'Quality people'

In response to whether higher executives should be setting an example on pay, Sir Stuart said there must be absolutely "no payments for failure".

However he said it was still right that the "appropriate" sums were paid to get "quality people" into businesses. He said there had to be a balance.

STORES CLOSING

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The closures will mean the loss of 780 jobs. The retailer is also planning to cut 450 head office jobs.

M&S also said UK like-for-like sales - which strip out the impact of new stores - fell 7.1% in the 13 weeks to 27 December. Total UK sales fell 3.4%.

Despite the fall in sales, the figures were not as bad as some had feared and the company's shares rose 2%.

The two regular stores closing will be those at Croydon Valley Retail Park and in Woking.

The firm also warned that its profit margins would be lower this year as a result of discounting, especially in food.

In the run-up to Christmas, the retailer held two sale days on which it cut prices by 20%.

M&S said that it had 15% less stock when it began its sale on 27 December than it had the previous year.

The announcements came on the same day that womenswear company Viyella, which was founded in 1784, became the latest long-established British company to call in the administrators.

Other firms which have reported falling sales or job losses on Wednesday included Barclays Bank, finance firm Cattles, Blacks Leisure, and chocolate firm Thorntons.

'No material difference'

The firm's overall group sales fell by 1.2%, though there was a 26.9% increase in international sales and a 29% rise in online sales.

Asked by our business editor whether he agreed with Simon Wolfson, the chief executive of Next, that the government's emergency VAT reduction had been a waste of time and money, Sir Stuart said that he "doesn't do politics".

However, Sir Stuart, a member of the prime minister's business council, added that the VAT decrease had "not made a material difference to our sales".

Sir Stuart also pointed out he thought the government was acting with the best of motives.

The retailer hopes that its redundancy programme, store closures and pension cuts will reduce its annual running costs by between 175m and 200m.

M&S plans to cap increases in its staff's pensionable pay to just 1% per year, reducing the liabilities of its final salary pension scheme.

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